Real Estate Tips—Ejido properties

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Buying real estate in Mexico can be tremendously rewarding, but you should also be aware that investing in real property in Mexico can present certain challenges, including Mexico´s distinctive real property legal foundations. One unique figure in Mexican property law involves what is known as ejido property. Ejido properties can be found throughout Mexico.

 A quick definition of ejidos is that they are usually communal farmlands.  But technically speaking, they are federally-owned properties granted in concession to rural communities for agricultural, ranching, forestry or community purposes.  The ejido properties are divided into smaller parcels that individuals or families are allowed to work.
 

Ejidos in the modern sense came out of the land reforms following the Mexican Revolution of 1910, with a legal basis in the Agriculture Law of 1915 and article 27 of the Mexican Constitution.  Because ejido land is federal property, it cannot be sold.

Formerly, ejido property could not be privatized to permit its purchase and sale, but in 1992 the Mexican Constitution and the Agriculture Law were reformed to permit ejido properties to be privatized.

But the privatization process is complex and involves specific legal procedures that can take some time, so you still have to be very careful to ensure that the privatization process was correctly done and the seller or developer didn´t take any “shortcuts” that could affect the security of your property title. Many an unwary investor has gotten into trouble buying and developing ejido property that was either never privatized or the privatization process was not fully and properly completed.  Even if the privatization process was followed to the letter, you still have to determine whether there are any latent legal actions against that privatization that could affect title later.

For developers and investors who are willing to spend the time, money and effort to convert ejido property into private property, there are many opportunities. Obviously land that has not been formally “regularized” is much less expensive than fully privatized property, leaving a very large profit margin for those willing to assume the risk. But this is an area in which you definitely need solid legal guidance.